A large number of NCDs will occur in April 2023. Edelweiss Financial Services and Indiabulls Commercial Credit NCDs came out of subscription last week. Subscriptions for Muhoot Finance, Muthoot Fincorp and Kosamattam Finance NCD will open this week. Which of these 3 NCD bonds is the best investment today?
Also read: Details of Mahila Samman Savings Scheme 2023
Muthoot Finance NCD – Details in the April 2023 issue
Muthoot Finance Limited is a Gold Loan NBFC company based in Kerala.
These NCDs will begin subscriptions on April 12, 2023 and end on April 26, 2023. These are assigned on a first-come, first-served basis and may end before this date.
These are safe NCDs.
The issue size is INR 7.5 billion with the option to hold subscriptions totaling INR 22.5 billion for a total of INR 30 billion.
The NCD bond value is Rs 1,000. The minimum lot size is 10 bonds.
These are available for tenures of 25, 37, and 61 months.
Interest is paid monthly and annually depending on the series of NCDs.
Muthoot Finance NCD interest rates are as follows:
| series | frequency | tenor | interest % | yield % | maturity amount |
|---|---|---|---|---|---|
| I | monthly | 37 | 7.75% | 8.25% | 1,000 |
| Ⅱ | monthly | 61 | 7.85% | 8.35% | 1,000 |
| Ⅲ | a year | twenty five | 7.75% | 8.25% | 1,000 |
| Ⅳ | a year | 37 | 8.00% | 8.50% | 1,000 |
| Ⅴ | a year | 61 | 8.10% | 8.60% | 1,000 |
| Ⅵ | NAMore | 37 | NAMore | 8.50% | 1,286 |
| VII | NAMore | 61 | NAMore | 8.60% | 1,521 |
Muthoot Fincorp NCD – Details in the April 2023 issue
Muthoot Fincorp Limited is a non-deposit NBFC company.
These NCDs will begin subscriptions on April 12, 2023 and end on April 26, 2023. These are assigned on a first-come, first-served basis and may end before this date.
These are safe NCDs.
The issue size is Rs 1.5 crore with the option to hold subscriptions totaling Rs. 1.5 crore for a total of Rs. 300 crore.
The NCD bond value is Rs 1,000. The minimum lot size is 10 bonds.
These are available for tenures of 27, 42, 60, and 84 months.
Interest is paid monthly, annually, or at maturity, depending on the series of NCDs.
Interest rates of Muhoot Fincorp NCD are as follows:
| series | frequency | tenor | interest % | yield % | maturity amount |
|---|---|---|---|---|---|
| I | monthly | 27 | 8.40% | 8.71% | 1,000 |
| Ⅱ | monthly | 42 | 8.65% | 9.00% | 1,000 |
| Ⅲ | monthly | 60 | 8.80% | 9.15% | 1,000 |
| Ⅳ | monthly | 84 | 9.00% | 9.37% | 1,000 |
| Ⅴ | a year | 60 | 9.15% | 9.15% | 1,000 |
| Ⅵ | Cumulative | 27 | NAMore | 8.71% | 1,207 |
| VII | Cumulative | 42 | NAMore | 9.00% | 1,353 |
| VIII | Cumulative | 84 | NAMore | 9.37% | 1,873 |
Kosamattam Finance NCD – Details Published April 2023
Kosamattam Finance Limited is a NBFC non-deposit company primarily engaged in gold loan business.
These NCDs will begin subscriptions on April 11, 2023 and end on April 25, 2023. These are assigned on a first-come, first-served basis and may end before this date.
These are safe NCDs.
The issue size is Rs 1.5 crore with an option to hold subscriptions totaling Rs 1.5 crore for a total of Rs 300 crore.
The NCD bond value is Rs 1,000. The minimum lot size is 10 bonds.
These are available for tenures from 15 to 88 months.
Interest is paid monthly and annually depending on the series of NCDs.
The interest rates of Kosamattam Finance NCD are as follows:
| series | frequency | tenor | interest % | yield % | maturity amount |
|---|---|---|---|---|---|
| I | Cumulative | 15 | NAMore | 8.50% | 1,107 |
| Ⅱ | monthly | twenty four | 8.75% | 9.11% | 1,000 |
| Ⅲ | Cumulative | 30 | NAMore | 8.85% | 1,236 |
| Ⅳ | monthly | 36 | 9.00% | 9.38% | 1,000 |
| Ⅴ | Cumulative | 39 | NAMore | 9.25% | 1,333 |
| Ⅵ | monthly | 48 | 9.50% | 9.92% | 1,000 |
| VII | Cumulative | 54 | NAMore | 9.43% | 1,500 |
| VIII | Cumulative | 88 | NAMore | 9.91% | 2,000 |
Muthoot Finance Vs. Muthoot Fincorp Vs. Kosamattam Finance NCD – April 2023 – Which Is Better?
#1 – Secured Bonds – All three of these bonds are NCD collateralized bonds. It means that investors in NCD bonds will have priority in repaying principal and interest, even if such companies are hit by a financial crisis and shut down for whatever reason.
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#2 – Interest Rates – Mutooth Finance has the lowest interest rates, followed by Muthoof Fin Corp. Of these three his NCD bonds, Kosamattam Finance has the highest interest rates.
#3 – NCD bond holding period – Muhoot Finance offers tenures of up to 61 months, while Muthoot Fincorp and Kosamattam Finance offer tenures of 84 and 88 months. All three of these bonds are available in short to medium terms of 1 to 5 years, but then two offer his 7+ year term.
#4 – Credit Rating – Muthoot Finance and Muthoot Fincorp NCD are rated AA Stable by ICRA and CRISIL respectively, while Kosamattam Finance NCD is rated A-Stable by IND rating. By early 2022, Kosamattam Finance NCDs was rated BBB by the BWR Rating..
#5 – Company Profit – Earnings for all three companies increased year-on-year.
Muthoot Finance’s profit increased from SEK 3,168 in FY2020 to SEK 4,031 in FY22. Muthoot Fincorp’s profit increased from INR 25.79 billion in FY2020 to INR 41.25 billion in FY22. Kosamatam Finance’s profit increased from INR 4.76 billion in FY2020 to INR 7.89 billion in FY22.
#6 – Risk Factors – All three of these companies have similar risk factors for NBFC companies. I will repeat it again for the sake of the reader.
In addition to NBFC fraud, there have been delays in principal and interest payments from some NBFC companies. Your money could be at risk. According to NCD’s prospectus, firm-specific risk factors include:
Muthoot Finance NCD – April 2023 – Risk Factors
Any volatility in the global economy, the Indian economy, banking and financial sectors may affect the company’s liquidity and may have a material adverse effect on the company’s financial condition.
Unexpected volatility in interest rates can affect a company’s performance.
Economic turmoil or recession in South India may affect the company.
A firm’s ability to control or reduce the level of stage 3 assets in its loan portfolio can impact firms.
Muthoot Fincorp NCD – April 23 – Risk Factors
Designated commercial and disbursing banks are instructed not to open and maintain checking accounts for customers who have taken credit facilities in the form of Cash Credit (CC)/Overdraft (OD) from the banking system. Failure to provide an alternative mechanism for cash withdrawals and deposits by financial institutions that do business with Designated Commercial and Clearing Banks may adversely affect the Company’s business, results of operations and financial condition. There is a nature.
Acquisition of real estate entails risks in the real estate sector, and our creditworthiness may be affected.
A company’s financial performance is particularly vulnerable to interest rate risk.
Kosamattam Finance NCD – April 23 – Risk Factors
They are subject to inspection by the RBI and any adverse action taken may affect the company’s business and operations.
Certain directors of the Company and its promoters are subject to certain legal proceedings and adverse conduct in such proceedings may affect the business of the Company.
Investors should refer to the full risk factors from a company’s respective NCD outlook.
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Muthoot Finance Vs. Muthoot Fincorp Vs. Kosamattam Finance NCD – April 2023 – Which Is Better?
There are no easy answers.
In terms of credit rating (subject to change), the order is Muhoot Finance, Muthoot Fincorp, and Kosamattam Finance.
Going by interest rate is exactly the opposite order (it’s obvious).
You can participate in one of these bonds if you understand the risk factors of investing in NBFC NCD bonds.
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Suresh KP is the founder of Myinvestmentideas. He is his NISM Certified – Investment Advisor and NISM Certified – Research Analyst. He has been analyzing financial markets for the past 20 years.
